The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives is expected to trend downward next week on profit-taking activities.
Interband Group of Companies senior palm oil trader Jim Teh said the price movement next week is expected to confine between RM3,200 and RM3,700 per tonne.
“The lower forecast is mainly due to July’s high CPO stock in Malaysia and Indonesia. Demand is so-so (neither very good nor very bad),” he told Bernama.
The Malaysian Palm Oil Board (MPOB), in its report released on Aug 10, revealed Malaysia’s CPO stocks for July 2022 rose 2.79 per cent to 905,946 tonnes from 881,315 tonnes recorded in June 2022.
Overall, palm oil stocks increased 7.71 per cent to 1.77 million tonnes from 1.65 million tonnes in the preceding month.
He added that world uncertainties like Ukraine’s war and increasing worries about global economic slowdown coupled with inflation and recession concerns have led to performance declines in most commodity markets, including the CPO.
Meanwhile, palm oil trader David Ng is a bit bullish in his projection of the CPO futures which he expects to trade between RM3,900 and RM4,200 per tonne.
He foresees the CPO futures to trend with upside bias given the bargain buying activities amid the weaker ringgit against the US dollar and the expectation of stronger exports in the coming weeks.
On a Friday-to-Friday basis, the spot month September 2022 decreased RM315 to RM4,090 a tonne, October 2022 lost RM306 to RM4,101 a tonne, November 2022 was RM318 lower at RM4,093 a tonne, and December 2022 declined RM329 to RM4,103 a tonne.
January 2023 was down by RM342 to RM4,132 and February 2023 eased RM339 to RM4,181 a tonne.
Total volume slid to 278,307 lots from 284,000 lots in the previous week, while open interest narrowed to 183,505 contracts from 191,133 contracts previously.
The physical CPO price for August South was reduced by RM250 to RM4,200 a tonne. – Bernama
Source: The Star
